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Phoenix Lending Survey: Positive Outlook for U.S. Economy in 2018

April 09, 2018, 07:26 AM
Filed Under: Economy

From the first quarter Phoenix Management “Lending Climate in America” Survey, results show a positive outlook for the U.S. economy and modest growth for the U.S. equity markets.

Lenders’ confidence on how they expect the U.S. economy to perform during the next six months remains at an overall ‘B’ grade. While lenders are still optimistic about the U.S. economy in the near term, the grade point average for the U.S. economy saw a slight decrease of 5 percentage points, with a GPA of 2.74 in Q1 2018 from 2.79 in Q4 2017. On the contrary, the GPA for the U.S. economy beyond the next six months saw a slight increase of 5 percentage points to 2.47 from the Q4 2017 results of 2.42.

Furthermore, lenders were surveyed on how they expect the U.S. equity markets to perform in 2018 after such impressive, double-digit growth in 2017. Of the lenders surveyed, 67 percent expect modest, single-digit growth, while 21 percent of lenders expect markets to remain flat in 2018.

In addition, lenders were surveyed regarding their customers' future plans and growth expectations over the next six to twelve months. Eighty-one percent of respondents expect their customers to make capital improvements, while 62 percent of lenders surveyed expect their customer to make an acquisition. While most of the lenders, 68 percent, expect moderate growth from their customers, 32 percent expect strong growth from their customers over the next six to twelve months.

Lenders were also surveyed this quarter on what they expect to be the biggest driver of new loans in Q2 2018. Thirty-three percent of lenders expect M&A activity to be the biggest driver of new loans, while 29 percent of lenders expect working capital to support organic growth and expansion to be the driver of new loans in Q2 2018.

"Lenders' confidence in the health of the U.S. economy continues to remain at an overall ‘B’ grade, which is a positive indication for continued growth and momentum throughout 2018,” said Michael Jacoby, Senior Managing Director and Shareholder of Phoenix.

To see the full results of Phoenix’s “Lending Climate in America” Survey, please visit here.

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